Honda Auto Receivables 2017-3 Owner Trust's issuance is an ABS transaction backed by prime auto loan receivables.


  • Honda Auto Receivables 2017-3 Owner Trust's issuance is an ABS transaction backed by prime auto loan receivables.
  • We assigned our ratings to the class A-1 through A-4 notes.
  • The ratings reflect our view of the transaction's credit support, credit enhancement, and payment and legal structures, among other factors.

The note issuance is an asset-backed securities transaction backed by prime 
auto loan receivables.

  • The availability of approximately 6.1% credit support for the class A-1, A-2, A-3, and A-4 notes (collectively, the class A notes) based on stressed cash flow scenarios. This credit support level provides more than 10.0x coverage of our high-end expected net loss range of 0.50%-0.60% to the class A notes.
  • The timely interest and principal payments made under stressed cash flow modeling scenarios that are appropriate for each rating category.
  • The loss projections based on our review of American Honda Finance Corp.'s (Honda's) previous securitization performance, origination static pool data, and managed portfolio data; Honda's deal-level collateral characteristics compared with its prime auto finance company peers; and our forward-looking view of the economy.
  • Our expectation that under a moderate ('BBB') stress scenario, all else being equal, our ratings on the notes will not decline by more than one rating category from the assigned ratings over a 12-month period. Our ratings stability criteria describe the outer bound of credit deterioration within one year as being one rating category for 'AAA' rated securities
  • The credit enhancement in the form of an unrated subordinate certificate, a reserve fund, a yield supplement account, and excess spread.
  • The pool of prime auto loans, which has a weighted average FICO score of 771 and weighted average seasoning of approximately 13 months.
  • Honda's extensive securitization history and the performance of its transactions, which, in our view, have exhibited consistently low loss levels.
  • The transaction's payment and legal structures.